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Saturday, April 13, 2013

Gujarat FDI fact or farce ?

Going by the Gujarat government’s figures, memorandums
of understanding (MoUs) for Foreign Direct Investments (FDI) worth $876
billion were signed during its five biannual Vibrant Gujarat Global
Investors Summits from 2003 to 2011 and a whopping 84 per cent of the
projects have already been implemented or are under implementation.

This
would mean Gujarat has overtaken all of China, whose FDI inflows during
this period were to the tune of $600 billion. And, interestingly, after
the 2013 Vibrant Gujarat Global Investors Summit, the government chose
not to give out any MoU numbers when Chief Minister Narendra Modi
declared that, “Gujarat is now the gateway to India.”

Behind
the envelope calculations show that if the State had implemented even
60 per cent of the investments promised, it would have left the dragon
behind.

But, as it were, the latest figures of FDI
inflows for the financial year 2012-13 up to January this year indicate
that Gujarat ranks sixth in the country with Rs. 2,470 crore or 2.38 per
cent share.

Maharashtra continues to top the FDI
numbers with FDI of Rs. 40,999 crore or 40 per cent, followed by Delhi,
Tamil Nadu, Andhra Pradesh and Karnataka.

Gujarat was slightly ahead of West Bengal in 2012-13, which got FDI of Rs. 1,934 crore.

In
fact, Gujarat’s share in the FDI kitty has been heading southward
during the last three financial years from 3.38 per cent (Rs. 3,294
crore) in 2010-11, 2.85 per cent (Rs. 4,730 crore) in 2011-12 to 2.38
per cent (Rs. 2,470 crore) now. These numbers contradict the State
government’s claim that Gujarat had bucked the worldwide overall
economic downturn to become the engine of India’s growth.

Nothwithstanding
the government claims, it is an open fact that Gujarat’s FDI numbers
have always been the same or lower through the years.

Reserve
Bank of India’s FDI figures encompassing the decade of 2000 to 2011
reveal that while Gujarat received just about $7.2 billion in FDI,
Maharashtra got $45.8 billion and Delhi over $26 billion. Even Karnataka
and Tamil Nadu, with a $8.3 billion and $7.3 billion share, got a
larger piece of the national FDI pie.

Albeit the
overall FDI inflow into India fell by some 30 per cent during 2012-13,
Gujarat has beaten this, as the numbers suggest, with a bigger decline
close to 50 per cent.